a) RBI vide vide press release dated June 17, 2020 has proposed changes in regulations applicable to Housing Finance Companies (HFCs).
b) Post transfer of regulation of HFCs from National Housing Bank (NHB) to Reserve Bank with effect from August 09, 2019, a Press Release dated August 13, 2019 was issued stating that Reserve Bank will carry out a review of the extant regulatory framework applicable to HFCs and come out with revised regulations in due course, and till such time HFCs shall continue to comply with the directions and instructions issued by NHB. In partial amendment to the aforesaid circular, it has been decided to extend the relaxation provided in the circular for issuers who intend/propose to list their Non-Convertible Debentures (NCDs) /Non-Convertible Redeemable Preference Share (NCRPS) /Commercial Papers (CPs) for disclosure of financial results for another one month.
c) The Reserve Bank has undertaken the said review and has identified a few changes which are proposed to be prescribed for HFCs. These are as follows:
1. Defining principal business and qualifying assets for HFCs
2. Defining the phrase ‘providing finance for housing’ or ‘housing finance’;
3. Classifying HFCs as systemically important (asset size of ₹500 crore & above) and non-systemically important (asset size less than ₹500 crore)
4. Reserve Bank’s directions on Liquidity Risk framework &, LCR, securitization, etc., for NBFCs, to be made applicable to HFCs.
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